Reader Case Study – This Guy Doesn’t Need My Help

It has been a while since we did a reader case study here on Mr. Money Mustache, although that is not for lack of submissions. The email inbox is more vibrant than ever, there are problems to be solved and 108 draft articles waiting to be finished and published. But I’ve got a really fun outdoor project on the go right now which is keeping the blog work a bit sporadic for at least another week or two.

Luckily, people are out there solving their own problems while I’m away, and I thought YOU might get some inspiration from it as well. Check out this recent story sent in by a reader we’ll call JJ:

Title: Big Fan, Free Book

MMM,

I’ve always considered myself pretty financially savvy (I’m a CPA and CFO of a company), as well as relatively frugal. While all of my buddies were out buying huge homes and new Range Rovers, I was the guy who maxed out his 401K and saved ~30%-50% of his income. Not that it was all that hard – like you I was blessed with a good salary – but still, I thought I was way ahead of the game.

negotiated an arrangement to work part time from home (I hated going to work everyday). So now I make half the money for about 15 hours of work, with no 30 mile commute each way. Dropping my expenses down to $35K was key to this.

And I’m getting tons of offers from my connections to do other work. Like you say, even in (semi) retirement, opportunities to earn income just find you

I will likely quit the job in the next 6-9 months and retire. It took reading your blog to realize, SHIT! If I just stop spending so damn much (even though I can ‘afford’ it), I don’t have to work much longer!! I feel like an idiot.

So thanks for the push to cut back my spending and get off my ass on the rent houses. I’ve been looking at residential investing for seven F’in years, but just never ‘found the time’. They’re now a key part of my early retirement plan. Dallas is a great area to invest. I spent $60K-$65K on the last two houses (3 bed 2 bath), put $20K-$25K in rehab in each one (plus a lot of sweat equity of course), renting them out for $1400-$1500. A no brainer. Let me know if you’d like to see some before and after pics. I’m kinda proud of it:)

Other details: in a relationship, one young child in a household of three in a high-rent area with great schools.

Anyway, I digress. The reason I’m emailing is about a book. I notice you have an MMM Recommendations section, but I don’t see this book on there. Beyond Wealth by Alexander Green, “The Road Map to a Rich Life”**

Dude. This book is awesome.

A few quotes:

“I feel strongly that everyone should strive for some measure of financial freedom… You can’t reach your potential or live life to the fullest if you spend your days swimming in concerns about money” (intro)

On trust – “trust is something to be built up, protected, valued, cherished, and carefully preserved. It is the one thing that changes everything.” (p30)

On greed – “our nation has a happiness fetish…much of economic misery we see today is due to the unbridled pursuit of bigger houses, fancier cars, and more exorbitant trips. The lure of consumer culture and an obsession with more is precisely what keeps so many from contentment” (p31)

On personal freedom – “freedom, after all, is not the absence of responsibility. It is the absence of restraints imposed by others. To be truly free, however, we must generally impose restraints on ourselves. That often means delayed gratification…or settling for less… or simply doing without” (p35)

On keeping up with the Jones “stop regarding life as an ongoing competition for social status. Opt out of the game – even if everyone else seems to be playing it” (p36)

He also covers topics such as negative visualization, de-cluttering your life, the importance of reading, going without TV or listening to the news, having a wealth of interests, music, etc. A very mustachian book in my opinion.

Needless to say, this email made me very happy.

I am highly impressed with JJ, and with the many other people who have made similar changes.

Let’s just revel in those numbers for a minute: he went from spending $100,000 per year, to $35,000, in less than a year. All while increasing his general life satisfaction. And meanwhile, he increased his passive income from rental houses by over $30,000 per year. Even after slicing his employment income in half, he is far wealthier now, since at this end of the spectrum where you already have more than enough, spending is far more important than income. No matter what the “earn MORE so you can spend more!” gurus will try to tell you.

Although I feel the message of this blog is applicable to all income categories, people like JJ are really at the core of my target audience: those who earn a solid amount, but are spending far more than they need to, thus dooming themselves to decades of unnecessary alarm clocks and traffic jams – just because they never took the time to step back and ask “is there another way”?

Thanks for writing in JJ, and may your former coworkers be jealous enough to learn from your example!

Want More?

Very Nice…

Get MMM Automatically By Email

What an awesome transformation. Over the past few years, I’ve seen changes similar to those of JJ. I’ve gone from spending more than I make to owning a house, and only spending 40% of my salaried income. We’re now pushing the $100k mark in our investments, and we’re looking to buy our first investment property. General happiness doesn’t come from spending or keeping up with the Joneses. It comes from within, from family, from traveling, from not having to deal with a shitty hour long commute to spend 8 shitty hours behind a desk just so that we can enjoy our weekends. Cheers MMM and JJ.

There seem to be less of us chasing early financial independence here in the UK compared with the US. Or at least less of us talking about it openly…

I started on the journey in 2007 and live the phrase “save hard, invest wisely, retire early”. I save 60% of gross earnings while living in one of the worlds most expensive cities and in 6 years have gone from nowhere to 70% of the way to my early retirement number.

So financially I’m way ahead yet with less than 3 years to run what I’ve found is that by opting out of consumerism my life is now more fulfilling as well.

Me too.. and I need his help in buying one of those cash-cow Dallas rental properties too!

As a philosophical side-note, when I study the writing style of Jim Collins, Johnny Moneyseed and JJ who sent in this story, I notice a pattern – could there be a connection between Financial Independence and Swearing? ;-)

I think swearing is essential to leading any type of balanced and low-stress life. Different manners of early retirement are a subset of those low-stress lives.
There’s far too much nonsense in life for us to take it all seriously. We have to literally be able to say “Fuck it” in response to a lot of different situations if we expect to make it through our days relatively unscathed.
Self inhibition from the natural human tendency to hurl the occasional Expletive in response to the Hassles of Life is just going to lead to bottled up emotions and other weird psychological problems.
I think you’ll find that many of the most successful people, by our local Mustachian definition, are going to play fast and loose with the rules of Proper Gentlemen’s English.

No question! Much like one of your earlier posts its about giving the middle finger to many of the stupid things we have in our lives!!! This story is awesome and truly inspirational this is what I’m working towards, well done!

Actually, young men, although I quite like your blog and am heartily in favor of all your goals, I could do with a clean up of the language around here.

It doesn’t leave a good impression. I understand you’re all trying to prove you are virile 21st century men. However, you alienate generations before you and even those your age who feel swearing is for smacking your finger with a hammer and to be done in private.

Sorry Mrs. Emily. The goal is not to please everyone, but rather to be true to myself and through that achieve a more authentic voice and thus a more receptive audience.

Even if I must limit the audience to swearing-tolerant people (75% of the population? 50%?), the blog could still grow by 500-fold and still not run out of people in the United States alone. Since that would theoretically make this blog bigger than the NFL, that’s plenty of audience for me!

As a high school teacher I’m used to swearing- the only sad thing is that it limits me from having my students read the blog directly. Instead I have to copy, “modify”, and print the articles. I always make sure to put where the article came from, that way the students who are more interested will hopefully come and look on their own. If they read articles with swearing on their own time I’m not responsible so less angry parents!

Wow – I am honored that MMM articles are sneaking into the school curriculum!

Ironically, having Real Language as part of articles like these would probably have a positive effect on high school students. It shows that the person writing it is not stuck in the usual corporate/religious/government shackles, and thus it might be worth noting what the author has to say. Kids are quick to tune out of a message they perceive to be from The Man, and quick to warm to anything that displays a bit of countercultural freedom.

I believe MMM is on to something, but the swearing isn’t the cause, it’s the symptom. Most people mindlessly follow the group, because we need the group for survival. Violate the groups mores -> get ejected from said group -> Die alone of exposure, starvation, saber tooth tigers, etc. Currently, the group mores say spend all of your money (or more than all of your money) on relatively worthless shit. They also say don’t swear. We are willing to go against the groupthink (thus we’re here). We’re willing to drive old cars, fix broken garden implements (hell, even have gardens) and swear. People willing to break norms in one way, are frequently willing break them in many. Hell yea!

The incongruity, and good timing, of your swearing, MMM, is what makes it work, I think. It just is kind of funny to hear the f-word alongside a sentence about credit card interest rates. Also, the frugality of your swearing itself that JCollins alluded to, helps.

I don’t swear and if I did, it would sound fake because it’s not me. I don’t want my kids to swear either. (I don’t want their grandma’s to swear either…but alas, grandmas will do what they like.)

We readers can tell you’re not just trying to be “a cool rebel” or to show off your virility (well maybe a little of that) and that you aren’t actually trying to offend anyone just for the sake of being a jerk…though some will be offended anyway. You do come off as genuine and that is what matters. So if you really can’t be genuine or funny without swearing then by all means, keep it up.

Also, I would be willing to bet that if you were in another family’s house in a far-off country where you knew that swearing was not the custom and considered to be bad manners, that you would refrain. Tell me if I am wrong, though.

Also, for the record, in everyday life I think it is more unusual to meet a person who never swears than one who does. So I am not at all convinced that refraining from swearing is a sign of buying into groupthink, or that swearing alone is a sign of an independent spirit. It depends.

Swearing on a finance blog might count as a display of independence and hilarity. Swearing all by itself. No. It’s just bad manners.

But after all this, I am curious – does little MMM drop the f-bomb? What about Mrs. MMM?

Suppose this is a question of what you’re used to. As an european I had to read the article twise. Still missed the swearing. Man, you’ve got to have good eyes to spot any! (Was there any? Do I define swearing differently?) Besides: there’s more swearing in our schoolbooks than this, so.. Still haven’t made us all Mustachians, sadly, so there can be no connection. ;-)

Good for you, JJ! Sounds like you’re living the dream. I’m a CPA too so it’s always interesting to find out what others in my profession are up to. Unfortunately most of my colleagues are still buying crap they don’t need and keeping up with the Joneses.
I don’t plan on being a CFO so it’ll take me a bit longer.. with a few breaks and side trips, but I’m right behind you, amigo!

Nice one! It gives me so much strength, reading stories like that. Even though I’m in totally different position, the main understanding should be that there always is a way. One just need to sit down and think about it. Thinking “hurts” many people but is worth it :)

I think if you have someone you trust manage them for you, it could be a possibility. I just visited my mom in Florida and one of her friends, along with owning several of his own rentals, manages rentals for his wealthy friends (whom don’t live in FL). He fixes them up, rents them out, and in return gets first months rent and 10% after that. It works out well for his friends because they’re able to take advantage of the cheap housing market in FL without having to live there. He only takes 10%, which isn’t a ton considering his friends don’t have to do any of the upkeep or deal with the renters. Sounds like a winning situation for his friends, as long as they have the cash to buy the homes. In fact, I’m having a hard time understanding the benefit of managing the properties with such little profit on his part.

I have personal experience with that. When we relocated for work we were not able to sell the house and so became accidental landlords. With a bad tenant, it was awful. Very tough to keep them accountable on rent and to check on the little things that went wrong. We ended up having to do an eviction which was an ugly time and money suck. Our next renters were friends of friends and they were fabulous, did their own repairs and treated the place very well. So, speaking from personal experience I would say be wary of the out-of-town rental.

I would love to hear more details about how he cut his spending. We can see clearly some steps he took to increase his wealth and income as well as quality of life, but I would very much like to see how he went down to 35% of his spending within a year. Ramit Sethi says it can’t be done, but many Mustachians disprove his claim!

Absolutely, I see how he cut some by dropping the commute, the costs of owning a second car, riding a bike, and altering his health insurance, but $65K, there’s got to be much more going on. I would definitely like to hear that story!

Awesome read and inspiring to hear someone make such a bold commitment!

Unfortunately for me I started the push toward financial independence after making a poorly timed (and poorly financed – a first 7/1 ARM for 80% of the purchase price and a second 5/1 ARM for 20%, which was recommended by our broker – my wife’s uncle…) decision 6 years ago to buy a condo in southern California. That set us back a few years, but we’re righting the ship now that we’ve discovered some of the wise teachings of the PF community. Expensive lesson.

We saw a fee-only financial planner shortly after buying the condo and again last summer. He said we’ve done an amazing job eliminating debt and saving for retirement. Our current goal is to buy a house to raise our family and we were planning on saving for the next 5-6 years to put a huge chunk down, but he came back with a plan that he said he never thought he’d recommend, but since we were so financially disciplined he thought we could pull it off. He wanted us to borrow from our 401k to pay down the condo a little further to do a traditional sale then buy a $600K house with 3.5% down with a FHA loan (fees are 1.75% up front then 1.25% per year with a 5yr minimum until your loan-to-value is <78% and they may be rising). At this point I'd rather continue saving for a few years for a large down payment so hopefully we can keep our condo and rent it out rather than taking a huge loss.

Oh yeah, and when he asked about our goal retirement age I answered 55 (we're in our early 30's with 2 little boys). His comments were, "Not likely, overly optimistic." We'll see…

Man, I wish there were some decent fixer rental properties in our area for $60-$65K (that's roughly the fees for a $600K house purchased with a FHA loan!!!)

MMM is quite right that this guy doesn’t need his help. At worst he needed a kick in the pants rather than a punch in the face. Not to be too much of a critic here but I’m not even sure how I would spend 100k in a year short of spending half my time on luxury vacations. Dallas is not a high-cost area, what in the world was he buying? Getting it all the way down to 35k is nothing to laugh at (for one person? What does does the other partner in the relationship do?) but I have a hard time believing his story involved anything more than a few easy and relatively common-sense choices. I mean, how many people have a vacation property just sitting around to sell? Would that we could all be senior executives in cheap states. MMM says this is his target audience but I have a hunch that his ACTUAL audience looks a bit different.

“Would that we could all be senior executives in cheap states”. Sound almost complainypants to me. Why can’t you live in a cheap state? MMM already advocates moving. Instead of moving within Boston, DC or SF, you could move to NM, TX or AL. The only one stopping you is you. Same goes for being an executive. Get the education and sell yourself. MMM sort of outlines how. Or get a useful skill/side hustle (MMM mentions welding) that can get you over $100k. MMM has repeatedly said if you don’t make that, you’re not doing something right. By being here, you show knowledge, understanding and flexibility. All are desireable qualities. Make them work for you!

Point taken, Call 911, that definitely fringed on sounding complainypants. I humbly beg forgiveness from the Mustacho-sphere.

The idea of moving is sometimes a good one, but we have to at least acknowledge that picking up and moving across the country is one of the least likely life changes discussed on this blog. Particularly if one’s career happens to not exist in the private sector. MMM’s discussion of useful skills like welding and carpentry was actually one of my favorite posts and I hope to move in that direction as soon as possible. I do have to disagree that MMM kinda shows us how to become an executive. Seems more like the opposite, how to start as an executive (or reasonably skilled/creative professional) and then get to a point of badassity where you never have to do that again unless it’s just a shit-ton of fun.

MMM also made a good point that this is an example of a guy turning back the clock on lifestyle inflation, even though he theoretically could afford a lavish cost of living. We need more examples like this, if only just to show that it’s not crazy-talk or socially stigmatized.

I still think I could only spend that much if I hired a full-time staff to change my catheter and bedpan every day on my yacht but JJ’s extra details were helpful in explaining the transition. Sounds like the MMM Main Message in action: Just say No to Stuff.

Yes, it is harder to move than to cut your clothing budget, but we moved a year ago from a bigger fancy house (requiring lots of driving) to a more modest one, and it has been such a helpful change – we have breathing room and a much better savings rate. It was a lot of work to sell the house, but we were motivated and now our life is less stressful too. So I would definitely encourage anyone to consider it!

Totally agree re: lower stress levels when getting rid of superfluous stuff. I felt the same way when we moved close to work (as well a grocery store, library, kids’ school etc) and sold our car (we are car-less since). It’s so less stressful and I feel much happier. Can’t believe we voluntarily had car payments, insurance bills, parking fees, road tax, gas bills, maintenance charges etc!

I believe this may be the best part of the MMM experience. As a group, we all know we suck, and are not afraid to admit it, either to ourselves or others. I said you were approaching complainypants, and you said thank you! I’ve been all over the internets and haven’t found this level of respect or self evaluation anywhere else. It moves me.
Anyhow, you’re right about MMM not showing us how to be executives, and I also beg your forgiveness. I believe mustashianism is about conscious spending (luxury/convenience is OK, just be aware of what you’re sacrificing), and flexibility. I applaud your effort to gain new marketable skills – it shows off your flexibility! Many people say “I can’t do that”, just because they never have, or never thought about how to learn to “do that”. You have the tools to get to the top 5% – just go and kick the ass of the other 95%!

Look at these two badasses, Call911 and FederalMustache, conversing and displaying such mastery of Mustachian principles. Brings a tear to my eye!

I too must apologize, for not being much of a “How to Be An Executive” cheerleader. I would have written enthusiastically about the topic about 10 years ago, as I used to read all the management books and was all excited to move up as quickly as possible. But being in a different stage of life now, I’m much more interested in small scale entrepreneurial stuff rather than the workings of big companies.

See, executive jobs pay so well, that you quickly end up financially independent if you don’t vigorously waste all your earnings as soon as they come in. At that point, a Mustachian is faced with the question “Would I do this job for FREE? Because if not, I need to get myself outta here”. Since I wasn’t one of the few who love the workings of the big company enough to pursue it for life regardless of money (people like John Chambers and Jack Welch), I was left with no magic advice for getting ahead in that field.

There are plenty of great books on it, though – people management in general.

I actually have a vacation property just sitting around. I’m not a high paid executive either. I’m an assistant in NYC. Own my co-op in NJ and am in the process of buying a two family house. I will rent out the co-op as it is underwater at the moment and I’m selling the vacation house because with my new bigger two family, I won’t have time to go up to the Catskills as often.

I’m only 38 years old and have traveled the world (quit my jobs several times as well to have lots of free time). I’m definitely not frugal enough yet, but I’m getting there.

I would love a follow-up six or nine months from now when this dude is retired. Before and after pictures are also very much my thing. I loooooooooove reader case studies, btw. Guess I’m going to swear a bit more often too…;-)

That is a very impressive story. Kudos to JJ for making the changes that will hopefully allow him to retire a few months.

I can easily understand how he could be spending $100K a year before. I could probably up my a few thousand dollars a year by switching from cooking at home to eating out, and another couple thousand a year by getting the top of the line cable package. And so on and so forth down every line item of spending in my budget. And I haven’t even gotten to the big ticket items like rent and car costs yet.

Today I would have a dog walker and a house cleaner come in while I went for a mani/pedi and had my hair styled. I could hit a dress shop on my way home so I would have something to wear to the restaurant tonight. I would taxi there and back so I could enjoy some champagne with my meal.

The masseuse would come to the house just before bed to help me relax because spending all that money is very stressful.

The snow is melting and revealing some gifts the dogs have deposited there over the winter. I bet there is someone I could pay to come and do the spring scooping for me.

Also, he had a vacation home. A second home. Didn’t say if it was paid for fully yet (most likely not).

The more stuff you own (and if you have a second home you can have more stuff) the more stuff breaks. Pools and jacuzzis are expensive to maintain. When you make enough money, a small amount of wear and tear becomes a replacement item when the old thing was still usable or could just use some TLC.

Much more often, I hear the opposite from high-income people: HOW COULD ANYONE GET BY ON LESS THAN $100K??

People assume that if they are currently spending $200k, it would be instant deprivation and permanent sadness to spend a dime less. Or they blame it on their expensive area, or the five kids in private school, etc. Part of breaking this pattern is seeing someone else in your situation who has already done it successfully (i.e., they are leading a happier life after the change than before it).

Dallas is a lot harder to be frugal in than where I live (Austin). At least an old friend of mine told me she spent a lot more money when she moved there for a job. She had to eat out at lunch with her co-workers because that was the only way to find out important information she needed. She had to pay a percent of the total bill no matter how little she ordered because otherwise you get a bad reputation. You have to dress up more there, and not just with less casual clothes, but from the right designers, blah blah blah. It’s horrible. She eventually moved back here and is spending less again (same kind of job–working in insurance).

So if you have to wear pricey clothes (even if you shop in resale shops) and if you have to have a new car every three years and you have to eat out a lot (and restaurants are almost the only thing that Dallas does well, in my opinion), and you get a mega house which you keep at 68 degrees (or less) throughout the summers where the LOW temperature is in the upper 70s, and you put lots of water and chemicals on your lawn even during droughts so your HOA doesn’t fine you–oh, it’s easy to imagine spending crazy amounts of money on crap. And I’m not even getting into boat ownership, time-shares in Mexico, or football tickets.

(Disclaimer: I’ve never even had a net $35,000 income, so what do I know? And my parents moved to a Dallas suburb from a Houston suburb when I was in college, so I have a bias against Dallas.)

I’ve been to different parts of Texas and while I do recognize there are huge swings of affordability between areas, it sounds to me that there is a more simpler answer/issue. The ‘have to’ of those scenarios mentioned are really a solution to problem. In this case, networking/careerism. I’d say, those are ways to do it, but even simpler but often more difficult is how your own personality functions. You dont have to be the best dressed or most spending to network. If your personality trumps the actions above, you’ll get where you want.

Dallas is its own weird reality show of a city full of excess (just from what I’ve seen/heard, so my opinion isn’t really the most fair). But it highlights something I’ve always felt… until I started reading MMM’s site. “The more money I make, the less I feel I have.”

I was in Dallas yesterday (drove from and then back to Austin) for a work-related but fun event. Easy directions: “Get on I-35 North.”

Though I’ve never spent much time there, and my friends who live there seem happy with it, Dallas — like Houston, for that matter — makes Austin look like a compact city, even considering the sprawl that Austin has compared to places like Seattle, San Francisco, NYC, etc. At least for now, I don’t have the kind of job that requires me to wear especially fashionable clothing (and I hope I never do), but the gas alone would sure cost a lot to get around Dallas — it’s crazily spread out.

I live pretty close in — 1.5m from downtown Austin — and that was the intent in moving here. Not that I always do (depends on the expected grocery load), but I sometimes bike to the grocery, am easy bike to downtown, the UT campus and all that surrounds it, etc. Can get to the airport — at least when flights / bus schedules mesh — for a dollar.

OTOH, housing is a huge chunk of the budget, and that’s one thing that can be had much more cheaply in other (Texas) cities.

Don’t want to meddle, just make sure your know what you are doing staying with such a person. She’s still just a girlfriend, so it’s not too late :) As for me, sad to say, I am sure that my husband will delay my retirement goals by at least a decade. Not complaining, of course, that is my responsibility for making such a choice of a life partner. Only wish I knew how to make things better.
Example – his recent purchase of a huge smart 3D TV and continuous flow of Amazon packages of blu-ray discs. Recently he had this idea to buy a massage chair. When I objected, he said – “At least I am trying to stimulate the economy.” Thought I was gonna cry! :)

Holy cow — a $20k purse? What in the world is it made of??? I found my perfect purse on the clearance rack at the Vera Bradley outlet. And I will use it for years. Crazy expensive accessories are something that I have just never understood.

I don’t even know if my wife owns a purse.. in fact, I thought they had stopped making them: – a backpack carries more stuff and leaves your hands free to control the handlebars of your bike, so it is hard to imagine the function of a purse :-)

Just as a follow-up to the question, “How can you spend $100k/year”, check out the book “The Millionaire Next Door”. Lots of case studies in there of high-earners with low net worth—in other words, people who easily spend over $100k/year. There’s a comparison of two medical specialists making around $700k/year (IIRC), and one had a net worth of only $400k due to outrageous spending. Going from foggy memory, he bought a new luxury car every year, his wife spent $30k/year on clothes, he had a $60k/year country club membership, plus vacations and plenty of stuff I don’t remember. The other doctor wasn’t at MMM levels of spending restraint by any means, but lived rather modestly relative to his income (and therefore had the seven-figure net worth you’d expect).

I wonder if JJ’s $35k/year includes housing costs? He said he lives in a “high rent area”. How high is high? Also, he said he didn’t indicate if that $35k/year is just for him, or if that also covers the child and person with whom he’s in a relationship.

Just for reference, my annual expenses (family of three with one on the way) push $80k/year, but about 40% of that is housing. The housing is worth it for now while I’m still working and making the big bucks (saving over 70% of net pay). When I quit this job, we’ll buy a place outright in a lower-cost area. Our remaining annual $50k-ish per year has been tough to crack… our grocery bill is higher than many people here (probably too much organic/grass-fed meat), more eating-out than we should, still on an overpriced Verizon smartphone plan, an indulgent vacation, etc. I think it’s a lot of little hedonistic adaptations that add up. I don’t think anyone (outside of MMM/ERE readership of course) would call us extravagant: no cable, Costco instead of Whole Foods, 9+ year-old non-luxury cars (owned outright), use public transportation, no iPads, etc. My friends all call me cheap. But there it is.

Interesting. I would think that the CFO of a company wouldn’t have the time to shop for and rehab a couple houses in a year… and even if he did, that it would be worth giving up his high-priced, limited spare time for.

That said, if he treated it as a hobby, then it would be the magic type of hobby that I always dream of that actually makes you money…

That was one of the parts of the story that I liked the most. You’ve got this high-income executive guy, but he is not too proud to rip down the moldy tiles in an old shower and clean up crap left by previous tenants before a house was abandoned in the housing crash.

I often write that regardless of how important you think you are, it is healthy to get down to some old-fashioned hard work in your limited spare time. That is why regardless of income or wealth, I’ll always be cutting my own lawn and standing atop ladders cleaning my own gutters. Paradoxically, developing these extra skills instead of just playing golf or going to resorts is what GIVES you more free time over the rest of your life. The multi-skilled person is able to live a more efficient and worry-free life: http://www.mrmoneymustache.com/2012/10/18/why-your-time-is-worth-way-more-than-25-per-hour/

Wow, another great story of a successful mustachian. JJ definitely has the right idea, of how you can’t live life to the fullest if you’re swimming in worries about money. It’s consistent with my observations also, where on many occasions non mustachians say I am depriving myself because I don’t have a big house full of stuff, or a fancy expensive car. Yet, when I look at how people here used to live 100 years or more ago, or how many people in the world live now, I’m living the life of luxury! By the way, who are these Joneses I am supposed to keep up with? The only Jones I know is a construction electrician, whom I haven’t seen for many years, and I don’t think he gives a damn about how much, and what kind of stuff I have.

It really is great having financial freedom. Presently I have a lead on a job (nothing firm yet) which would be full time, good pay, would probably run to years end, and is about 100 Km away. In the past I would jump on it now and ask questions later, but instead am weighing the pros and cons. That beats the hell out of having a lot of stuff and worrying about paying for it all.

Last but not least, the gurus of the endless growth and reckless consumption believe that if there were more mustachians the economy would collapse. I couldn’t agree more, it would actually lead to a more sustainable and sensible way of life with a lot less stress and the problems it causes, and a much lower environmental impact.

Heheh.. a 100km (62 mile) commute is so far beyond what I consider reasonable that you might have well have described a daily commute to Antarctica. 10-15 is about the upper limit on reasonable, as for me there would be no excuse not to bike every day, even in snow.

You’re right, 100 Km (that’s each way, not round trip) is absolutely insane, although I know many people do it and have been doing so for many years. If I did take the job I would find a temporary place to stay nearby. In any event, it’s one of the factors to consider and why I am not ready to commit myself just yet.

I’m sure JJ would have this to say: Easy, I just stopped living on auto-pilot, woke the fuck up and cut the shit. His story is nearly identical to mine (except I have one rental and I kept the vacation property). The “what the fuck” moment came for me a few years ago…then ass kicked me when I read the original MMM piece on MSN, when I was on my way to a conscious journey. I made 220,000 a year (net) and was saving half and blowing the other, thinking I was doing just great. It has taken me 2 (now on 3) years to come down off my addicted lifestyle, so kudos to JJ for doing it in one. My spending is all documented for my own personal embarrassment. Started the journey spending 114,986/yr. Knocked it down to 54,396 in year 2. I’m near the end of the 1st quarter of year 3 and have it at about 35,000 for the rest of the year. How I did it…got rid of the mortgages with my savings (40,000/yr right there). Like I said, I was saving half my income, so 100,000 per year for roughly 16 years. I just wasn’t watching anything about my personal spending with the other 100,000 plus–WTF. Then, I cut the shit (all the shit, communication means alone were near 4000/yr), started to live consciously, and now question every expense that comes my way. Insurances, prices, necessities. Will this save me money or cost me money? I don’t have a mustache, you guys are hardcore muthafuckas. But, I can hold my own. So, the answer for me was; high income, high savings, and just a good old ass kick into the right frame of mind. Yep, I’m retired. 1/1/13 was my last day. I consult/teach now, and that’s just fine with me because I want a job to continue to fund my Roth. I’m 42. And yeah MMM, we obviously needed your help, or at least your example. I’d still be at the grind otherwise.

Wow – another extremely badass tale and again I notice plenty of appropriate profanity.. Thanks Al!

It is epecially cool that you came here from the big MSN feature of a year or so ago. That got 14 pages of violent complaints on the MSN site itself, yet it still yielded thousands of real people who chose to join in, become regular readers and fix some of their own shit while the complainers drifted off elsewhere on the Internet to find more things to complain about. An amazing contrast!

The reason I like to reminisce about the MSN Effect is that I just finished an interview with USA Today, which has an even wider circulation. If that sucker gets published in the way I hope it does, we can only imagine the results!

I knew I needed to get off my butt and find a rental in Dallas. I am young and was a little leery about “Tying myself down” but if he is finding deals that good, it is a definite no brainer. I need to talk to some people about these things.

My only quibble is MMM’s suggestion that he now has $30k in passive income. Looks like he has revenue of $35k or so but that doesn’t account for things like insurance, property taxes, repairs, vacancy and utilities. Most real estate investors would tell you that in the long run these costs will be 40-50% of the income stream which would put his actual cash flow closer to $20k/year.

Still not a bad thing – those returns on the amount he put in are still really good.

Good point, Fishing. Especially since Texas has much higher property taxes than my area of Colorado.

Around here, the expenses are nowhere near 40-50% on a good-quality single family residential (never had a single month of vacancy, ever, repairs are maybe $200/year, tenants of course pay their own utilities, etc.). But property taxes here on a $100k would still be $900/year, and insurance another $300 or so. And don’t forget appreciation on the houses themselves. When you buy a nice house at housing crash houses as JJ did, you KNOW it is going to rise faster than inflation, eventually to be sold in a boom and re-allocated to other assets if the yield drops.

Wow. I can’t believe MMM actually posted my email. To think I almost didn’t bother him with my book recommendation:)

I certainly don’t feel my story is worthy of ‘publication’, but I GREATLY appreciate all of the comments. You readers truly make this site better with your positive feedback and encouragement.

OK, it sounds like people want details, and being a numbers guy I appreciate that. At the risk of embarrassing myself here’s a quick breakdown of the spending cuts:

1) ** I have been debt free for some years, so this was no factor **

2) Cut housing cost in half while still living in a great place. Actually more than half. Previously I lived in a luxury high rise, complete with concierge and valet (I’m ducking my head in shame right now). Yep. Now I park my own car. It’s a tough life but I’m managing

3) Cut way back on the going out. My girlfriend & I cook almost every meal from home, and I catch up with friends over lunch or drinks/dinner at someone’s house. My cooking is actually edible now too

4) Starbucks, breakfast & lunch out were the norm. Brought leftovers for lunch when I worked full time, and was able to squeeze gym workouts in during the lunch hour as an added benefit (now I go to the gym whenever I damn well want!)

5) Learned to say NO to some of the fun things I’m invited to: college/pro sporting events, guided hunting/fishing trips, ski vacations, long weekends in Vegas, etc. Those things are fun. But not THAT much fun

6) Stopped buying shit. Clothes. Furniture. Gadgets. Books. You name it. I’ll buy it if I really need it

7) Quit playing golf. Took up guitar & photography instead. I sucked at golf anyway

8) Sold car #2 as mentioned. Insurance and upkeep alone ran ~$4K a year, not to mention depreciation

9) The vacation property was a drain, with property taxes, utilities, and the toys that go with it (ATV, boat, etc). Sold all that crap

14) Cut storage unit @ $150/mth and sold or gave away everything in it

15) Cut out the commute when I went part time

And honestly, I think that’s about it.

I just didn’t have a good PLAN for my money, so I figured saving 30%-50% was good enough and spent the rest. Now I have a plan, so it’s easy to say no to all that shit, while still having an awesome life full of family, friends, international travel, great food, and plenty of fun. I don’t miss any of it.

JJ I wonder if you l lived where I live. 1900 McKinney?
I spent 330k last year as a single male with no kids in his early 30s. I want to make a little blog detailing my experience. I wasn’t happy most of that, which is what caused the epiphany that led to this website.

JJ, I would love to have a chat with you. I live in Dallas, and I am planning to buy a house or two in the next year. I would love some advice on the real estate market and some of things you encountered.

JJ, I am a real estate agent in DFW, and one of my sub specialities is working with investors. I’m curious what area of DFW you purchased your house in. Was it Dallas, Mesquite, Desoto, Cedar Hill, or Lancaster? Recently I’ve seen those are the areas you can find homes in this price range to rent out, but most of the areas are less than desirable for my liking.

At one point in life when I first became financially independent, I actually tried to spend more money since I was still pulling in a good income. “Every dollar I earn from here is play money.” Even then I couldn’t spend 100k, it was too much work :-) It wasn’t really that much fun either, so spending dropped back to normal levels until I retired

So nice reading the comments – seems like many readers have successfully retired!
MMM, how about an anonymous online survey of readers sometime – age, married/not, combined annual income, savings %, net worth, estimated years to retirement (or how many years took to retire) etc. Don’t know whether it is a good habit or not, but I personally always like to benchmark myself against others – gives me a better idea how I am doing and how to improve my efforts.

Wow. To have done just the expense cut from $100k to $35k would have made one think they are now moving quickly to freedom. Or to have created the almost $3000 in passive income (at those prices I assume taxes must be very low, his net must be awesome) would have done the same.

But by combining the two, and then realizing the income tax difference between what it takes to live off of $100k and what it takes to live off of $35k, its a freaking instant change of life.

I’ve done the same (saved 30-50% my life, paid off my home by 35). Started a business working from home. My expenses are ‘only’ 60k/yr (but I realize without a mortgage payment how ridiculously high that is, even with the kids) Sounds like this is my kick in the butt to make a real plan.

That is a pretty epic story. The book recommendation is great and we are looking to do very similar things to JJ. I think the best part of the story was the description of the epiphany type moment. I’m not really sure when I had mine but I’m enjoying the benefits of it as well.

JJ, I do Vegas on the cheap and I still have a good time. I’ll probably be going this Friday to watch a professional pool tournament. I work out at the 24 Hour Fitness there (have a membership), and I don’t drink, smoke or gamble.

I’m just drawn to watching people blowing their money and how not to live. Crazy I know but I love to visit Vegas.

Mr. MMM, any way you could pass this guy my email or visa versa? I am looking at purchasing two home in the Dallas area over the next two years. I need some advice on the Dallas real estate market. I would greatly appreciate it!!!

Great story! It motivates me to keep going and look at different investment options :)

I’d love love love to have that health insurance premium—-how the heck do you guys get it so cheap? The bare bones policy that I found, the cheapest in the state, is well over $300 a month for one person.

I’ve learned that these premiums vary by state.. for example, Illinois is one of the cheapest insurance markets, Colorado is medium, and other states are much higher. A handy thing to keep in mind, along with property and income taxes and bike-friendliness, when deciding where to move in the future.

I’ve just been lurking recently, but I love that you shared this note, MMM. My own situation is very similar and frankly I’ve been a bit depressed about some of the mistakes I’ve made. That feeling of hopelessness is in itself its own trap, as one tends to fill the void with things that cost money, alcohol, going out to eat, massages, toys, etc.
This helps remind me that it’s not too late to reset and get there as soon as possible. Great inspiration!

JJ, way to go man! First off, I immediately bought your book recommendation; never heard of it and is right up my alley. I completely identify with the story, as I make a decent amount and have been spending like an idiot till I ran into MMM’s site. Congrats on everything! It’s true…you need no help…

cheers MMM! and howdo?
wow there were a lot of naysaying complainypantsed knuckleheads who commented on the MSN article! i read those comments as “f you and your financial sorcery!” most of them probably don’t have the sense to come over here and learn how changing their shower head can save them considerable green. i’ve ordered one from amazon for $8.
when i woke up a few years ago, i had 60 payments to go on a brand new car and over $20,000 in credit card debt that the card issuer decided to increase the interest rate to nearly 30% on. then i lost my job due to a chronic illness that i’ve enjoyed for over 10 years. i don’t see that as an excuse to blame everyone else and troll the internet for opportunities to poo-poo the success of mustachians.
the credit card debt is paid. the car is paid off. the mortgage is down to maybe 5 years. if a person with a chronic illness can make that kind of progress, what’s stopping other middle class folks? if only i had your sense, i would have been FI long ago.
i’ve read most of your articles on this blog and i’m working on my stash every day.
thanks for being here. wish i’d found you a while back.

Demographics – female, 62, Biologist, always frugal (thanks to Scottish side of my ancestry?), will be fully retired this August, basically don’t swear – because when I do everyone drops dead of shock, such fun to watch. Ex-husband swears a lot and spends to match (counter data point) – thought a new TV we didn’t need was a good buy because the monthly payments were so low, etc. Big sense of entitlement, you all know the type. Money issues were only part of the breakup, but when one spouse is calling the other cheap when the thriftiness lets the spender spend, it sure does contribute. Gail Vaz-Oxlade was right on when she called her show for couples in financial trouble “Til debt do us part”.

I paid $8 for my purse at a thrift store. It’s black leather, will last for years and I love it. Most everything I wear is from thrift stores as well and I work in an upscale office in the Washington, DC area. I do buy most of my shoes new, but they last me for many years because I don’t wear them unless I’m actually in the office. I wear flip flops or slide-on sneakers to drive which saves my dressy shoes (and my feet) lots of wear and tear.

Dear MMM, I can’t thank you enough for all your great advice, and the referral to Jim Collins 16 short investing lessons (from the last post). It was great for me and will also be fantastic for introducing my wife to the basics. Then I come to this post and read this wonderful story! Anyway, this one led me to the Book Recommendations, and I noticed that you may not yet have read “To Have Or To Be” by Erich Fromm. How great is this book? Seriously, since I was a young man, making infrequent “escapes” (aka travels) to re-ground myself from this weird consumer-marketing complex we live in, I’ve always taken one, two, or all 3 of these books with me: Thoreau’s “Walden”, Pirsig’s “Zen and the Art of Motorcycle Maintenance”, and Fromm’s “To Have Or To Be”. If you haven’t read it yet, I’m proud to be able to give this possibility to you. Also, I took an Econ class at San Francisco State in the early 90’s where “Economics Explained” was the first text! Awesome…loved it & kept it. Heilbroner’s my hero. Cheers!

I love all of your comments. I haven’t strayed considerably from the student lifestyle, as I put myself through college and law school while twice biking across America and thrice across America. 29 years of law practice later, I am at 400K gross a year but spend exactly the same amount, 60K, as in 2008, and it was exactly 50K from 1995-2007. Every January 1 I move 60K from Vanguard to my credit union checking account, and that’s all I have to spend for the year. Sometimes a small surplus of 3-5K, never once a deficit, and I paid for my younger brother’s and sister’s college tuition, and 75K gifted to an ex, from my annual spending. i am not a good investor and don’t really like to spend time managing my dough, but I just keep sticking every cent of every paycheck. quarterly distribution and annual bonus into Vanguard, year in, year out, for 25 years now. Now I have 4.1M and at age 53 I may just want to leave the stress of practicing law. Easy peasy with my stash. FYI, I live in the same apartment that I have rented for 19 years, right smack, dab on the water, with whales and seals and otters and eagles and herons as my daily companions. A nice place to live, and it has the most awesome side benefit of the greatest bicycle commute along the Puget Sound every day to my 8 minute water taxi ride into downtown Seattle . My 14 YO BMW, bought new with cash in 2001, still drives like a dream and has been a fantastic car for occasional luxe trips to Whistler, Vancouver or Portland, Life is good when you don’t spend a fortune (and I know, I know, I spend a comparative “fortune” compared to the hard core MM’s here). Keep it up everyone—it works!

Wow, I am in the processing of reinventing my financial (and otherwise) life, and this is making me wonder if I should go bolder. Opinions?

My husband — a force of nature with a giant heart. He made untold numbers of people’s lives better, while exercising no financial sense. So, there we were living in a very high-cost area, which didn’t fit in with our values vibe at all. We would look at each other and say, “The only people of color our children see around here are getting out of a truck to mow our neighbors’ lawns or clean their houses, every community event turns into an affluent over-achiever competition fest, AND there are no good bars or music, or really much of anything open after 9:00 p.m. Why the fuck do we live here?” “Oh, yeah, the schools are really, really good.” Education — a BIG shared value, but we sacrificed way too much. When you live in that kind of milieu, the ridiculousness starts to feel NORMAL.

Then hubby quit his government lawyer job to represent oppressed workers, fight discrimination and generally do good. We had financial projections that we thought were conservative and supportable. (While waiting to transfer into the state bar, he took a job at a woodworker/hardware shop. He found out the women on the staff were being paid less than the men and started agitating on behalf of the women workers. They fired his ass!) I was enormously proud of him but I kept the family books and his practice lost money at an impressive clip, contrary to projections — a fatal blow being that partner who drained all the accounts and ran off leaving nothing but overdue bills. “Honey, could you go over to the dark side just a little and maybe review some corporate employment manuals?” I would ask. Finally I said, “You are working too hard to make so little money — forget taking cases, ramp up the political campaign volunteering and do good on large scale.” (At least we won’t be hemorrhaging red ink from the law practice, I added silently.)

So we were living the double income two-kids suburban affluent life on one salary, sustained by tapping home equity and amassing credit card debt. And what kind of person spends a third of his retirement account restoring the TR3-A his uncle left him when he is bringing in no income? — Let me introduce you to my spouse!!

I had a certain time set aside to “Worry About Money” every day so it wouldn’t consume me. Defaulting on anything would threaten MY govt. job and my CPA license. I started working part time on top of my full time job. At one point I had three part time jobs — retail store, tutoring, and various accounting contract jobs. Exhausted me literally ended up in the hospital.”Honey,” I said, “we’ve got to sell this house and get outta here. This is unsustainable.”

We sold to a developer and downsized to a closer-in older home about a mile from the subway. Still ended up with a hefty FHA mortgage, but gradual financial recovery was on the horizon. Kid #1 was a starving actor/waitress in NY with some, not overwhelming student loan debt (thank you 529 plan), but making rent and living on her own, unlike 20% of her generation, and kid #2 had gotten a full tuition scholarship at her arty school, in a field where she won’t make 6 figures, but she’ll have a job. Both kids have worked since high school and somehow didn’t end up as entitled whiny-asses despite their youthful environs.

Then my husband was diagnosed with ALS. The disease progressed rapidly, in a sweater-unraveling-like nightmarish way. We quickly contracted to add a handicapped bed/bath to our ground floor. We took an awesome family vacation in Montreal, with the help of a fold up wheelchair, and then a fun, funny, sad, loving, at-times terrifying last couple’s trip to London with the help of a handicapped travel agency and a rental scooter. (Ask me about trying to scooter back to our hotel at night after a soccer game surrounded by thousands of inebriated British football fans.) Many medical, equipment and quality of life expenses were not covered by insurance. The credit card accounts were bulging with debt again, the remainder of my husband’s retirement accounts were wiped out, and I had borrowed from my retirement account to complete the bed/bath construction. I didn’t give a shit. Priority one — optimizing my husband’s length and quality of life. Priority two — I had enough life insurance that the kids would be alright if I keeled over.

My husband died within a year of diagnosis. There was a pension, and a little, not much, life insurance. As I slowly crawled out of the wreckage and surveyed the damage, I put the life insurance toward the credit card debt. Since I do not share my husband’s larger than life appetites for new tools, computer equipment, restaurant prime rib, premium TV packages, thinking the Holiday Inn instead of the Hilton is “roughing it,” etc., I spend much less and was able to pay off the credit card debt in a year.

Now I am paying extra on the mortgage so that I can hit 78% LTV when 60 months are up, which will allow me to eliminate the FHA mortgage insurance payment. (I think I can pay it off entirely by age 75. This may not impress you mustachioed people, but it impresses me.) The retirement loan is being paid through salary withholding. Next I will tackle the student loan debt to meet a commitment we made to the kids to cover undergrad. I think I will be able to retire in 3 1/2 years at age 61, with only mortgage debt.

To help with the mortgage I am converting the handicapped bed/bath into a private access B&B. I should be able to gross $80 a night with an initial investment of $18,000. I will be the only Airbnb with handicapped roll-in bath, sink, etc. in the locality. (Due to my occupation and personal preferences, I will get a license and pay all fees and taxes. Totally legit.) It will be a good deal for disabled vets and other visitors. It will put to good use a space in the house that just makes me sad. Win-win-win. All those expensive tools in the garage? I’m learning to use them! I just reconfigured my fence! Who knew I could do this?! So some sweat equity may reduce the construction bills.

A couple things on my list:

I live 0.8 miles from the subway. WHY am I driving a Prius 7 miles to work, a trip that takes 30 minutes on a good traffic day? (So the parking is subsidized and only costs $300 /year. Big whoop.) The kids are long gone and I don’t have to go pick them up from anywhere anymore.

WHY am I buying $7 lunches in the cafeteria when I have a grocery store 4 blocks from my home, a kitchen with all the normal appliances, and am a darned good cook?

WHY have I stopped going to the totally free gym at work? The one with all that expensive equipment and all those trainers roaming around?

Should I plan to sell the house? I’ve got 20% equity. In a year or so I can transfer my CPA to the state which contains the city my younger daughter is going to school in, loves and plans to work in. I could buy a condo. But I love my house, I love my yard, I love my dogs who love my yard (in the early post-death days they were the only thing that got me out of bed because they needed to be walked, fed, and petted). And, as a friend pointed out, when I become feeble I can move into the handicapped unit and rent out the rest of the house. Yippee! Cheery thought.

And I also need the garage. For the little British sports car. That my husband took his last trip in for the car club’s Fall Foliage tour, with me driving and the fold up wheelchair bungeed to the boot, and during which club members carried him in that wheelchair up a flight of restaurant stairs and back down again for the lunch stop. I’m still active and driving with that club. I defy anyone to drive that sweet little soft top and not have a big shit-eating grin on their face (OK, while picking bugs out of their teeth). I’m keeping the car, dammit.

What else, oh mustachioed ones? What I am missing or not considering in my still fog-like state?

I hate saying this but you need money to make or save money. On an income of 23k for a family of four we have no choice but to be frugal…..after all we are well below poverty level. Even MMM himself spends 25k a year on average and that is with zero mortgage/rent and only a family of three…. He is absolutely right all you people with cushy jobs have it easy and have no excuse for not saving. We even save and have saved 5k this year alone! So far no tips to help us as things like eating out even fast food, having a tv, drinking Starbucks, etc are foreign to us. Basically if you weren’t spending money on that stuff to begin with there are no savings to be had. lol. I did like the post about creating a blog because it would be sweet if I could do a blog and earn the princely sum of 2k a month!! Maybe can afford it since we are saving….not sure I’d have as much to say that would even interest people though. Hmmmm

Hi there! I’m relatively new to the blog and the Mustachian way. Being a fellow Dallasite, and an aspiring CPA, I found this post particularly inspiring. I’d love to get into contact with JJ, if he’s willing, to learn more about his career and Mustachian conversion.

Leave a Reply

To keep things non-promotional, please use a real name or nickname(not Blogger @ My Blog Name)

The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!

connect

welcome new readers

Take a look around. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article.

For more casual sampling, have a look at this complete list of all posts since the beginning of time or download the mobile app. Go ahead and click on any titles that intrigue you, and I hope to see you around here more often.